Everyone wants to open a successful business and wants to hire employees who can prove to be the best for their company.
Everything just looks so good in the beginning.
Slowly and gradually a business owner has to also understand the responsibilities which comes with starting a business such as- hiring right employees, manage paper work from day one, managing the clients, filling up taxes and payroll liabilities.
It is easy to also find a company which can fill payroll taxes for you and hire right employees for you but still, it is always better to get acquainted to the process by yourself.
In this article, we will try and explain how a small company can pay all there taxes on time with accuracy.
Understanding tax payments: When you are an employee you are never worried about filling your payroll taxes because it is a job of your employer.
Having said that, when you start a business you are now on the driving seat and you have to take care of the taxes of your company, your personal taxes as well as taxes of your employees.
You have to maintain proper books for each category and time to time get an audit done for your books so that you don't get yourself into any fuss when you start filling your taxes in the year end.
Self-employment tax: There is no separate tax called self-employment tax but this terms is referred to the payments of Medicare and social security.
Self-employment tax is not paid quarterly and it is submitted with your company's taxes in the end of the year.
As a small business owner, you should always have a sub sequential amount in your bank account as a cushion for unexpected tax liabilities and expenditure.
Deduction of business tax: Owner of small businesses can deduct business expenses from taxable income, which is a good perk.
This help the business owners to save some of their hard earn money on the taxes and they can take benefit from this.
However, it is very important to not get carried away by this because ultimately it is your hard earn money which you are blowing up on office expenditure.
Submission of payroll taxes: Submission of payroll taxes are must.
Even if you are hiring one single employee for your company, that also makes you liable for payroll tax.
While deducing the payroll tax from employee wages you also have to withhold federal and state tax with FICA.
Once you understand the amount you need to withhold, you will easily be able to submit tax.
This all sounds very daunting to small business owner, however it is very important to take right steps from the beginning of the business.
It becomes very difficult in the later stages to take care of your taxes and clean your books.